Labour reform can produce jobs, however wage premiums can increase. The recent labour reforms can facilitate in job creation, however they’ll not be good jobs, instead the wage premium are a victim, says K.R. Shyam Sundar, a labour economic expert and prof at XLRI-Xavier college of Management. In an interview, Sundar aforementioned whereas labour reforms can attract investments and aid industrial growth, it shouldn’t be seen as a cure for all issues. He argued that the new reforms have given employers the unilateral power to work out terms and conditions of service, and this may hamper wage growth. Poor financial gain growth hampers impoverishment alleviation, he said. However, Sundar lauded the growth of Social Security and universalization of formal employment agreement among regular wage earners.
The labour codes have made provision for universalization of formal employment agreement . what is going to this change? It now requires employer to supply a proper written employment agreement or appointment letter detailing the terms of contract. it’ll have three benefits: employment identity, assertion by workers of rights under the law, and supply clarity on the terms and condition of employment. It also reflects legislative poverty of the last 70 years, wherein a really basic requirement wasn’t provided for. The NDA (National Democratic Alliance) government has made provision for it now, a minimum of for normal wage workers. That way, it’s historic. In 2012-13, a touch over 50% didn’t have formal written employment agreement , and therefore the 2017-18 official data shows, 71.1% of the regular-wage, salaried workers within the non-agriculture wage space, didn’t have written formal employment contracts.
But there are issues here: the occupational safety and sanitary code (OSH Code) doesn’t provide for a cure if an employer doesn’t offer a proper written contract. there’s no corresponding penalty for violating firms on this. they ought to are in Industrial Relation Code rather than OSH code, in order that the grievance redressal committee could have addressed albeit there was no union .
There’s a transparent articulation of intention to universalize Social Security , but does one see an execution plan? Where is that the fund and defined goal? Overall, the Social Security code may be a positive one, but I find a couple of issues in it. the prevailing thresholds for EPF (employees’ provident fund) and ESI (employees’ state insurance) are retained, but by altering the definition of factories and increasing the edge of workers from 10 to twenty and, in some cases, 20 to 40, it won’t expand Social Security cover in existing organized sector. The positive, however, is that it seeks to incorporate informal workers and inter-state migrants, platform workers, etc. What the govt needs now’s give clarity whether this covers agriculture wage workers (not talking about farmers), beedi workers and domestic workers. This code, also, doesn’t mention registration and provision of a transportable Social Security card.